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Promissory Notes - Six-Hundred and 00/100 Dollars at CIBC...

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Promissory Notes A written promise to pay a certain amount of money, with or without interest. Maker – Party making the promise. Payee – The party to whom the promise is made. Face Value – The principal specified. Rate of Interest – Annual rate. Date of Issue – The date when the note is made. Term – The length of time of the note. Interest Period – Time from the date of issue to the legal due date. (There is a three day grace period added o this time period) Maturity Value – The amount payable on the due date (Face value plus interest). Legal due date: May 29, 2006 Face value: $600.00 Interest rate: 5.5% Interest period (days): 184 days Amount of interest: $16.64 Maturity value: $616.64 $600.00 St. Catharines November 26, 2005 Six Months after the date I Eric Guitard promise to pay to the order of John Doe
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Unformatted text preview: Six-Hundred and 00/100 ****** Dollars at CIBC Bank for a value received with interest at 5.5% per annum. Signed _________________ Present Value of Promissory Notes This is the value any time before the legal due date. Need to know the maturity value first. There are two interest rates involved. Rate of interest on the note. (Used to determine the maturity value) Rate that money is worth to determine the present value. Be careful with the rates Treasury Bills Promissory notes (Non-Interest Bearing) issued by government. Denominations of $1,000, $5,000, $25,000, $100,000, and $1,000,000. Terms – 91 Days, 182 Days, 364 Days T-bills are similar to non-interest bearing notes. They do not carry an interest rate, but are bought and sold on the open market....
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